Audit: Chinese assembly lines violate labor law

Workers who assemble iPhones and iPads often put in more than 60 hours per week — and sometimes work for a week straight — in violation of Chinese law, according to the first independent labor audit of the Chinese factories where Apple products are made.

The audit of Foxconn Technology Group by the Washington-based Fair Labor Association found “serious and pressing” violations of Chinese labor laws, prompting the biggest maker of Apple Inc. devices to pledge to cut working hours and give employees more oversight.

Inspectors found at least 50 breaches of Chinese regulations as well as the code of conduct Apple signed when it joined the FLA in January after deaths of workers at suppliers, the monitoring group said Thursday.

The report says Hon Hai Precision Industry Co., the Taiwanese company that runs the factories, is committing to reducing weekly work time to the legal Chinese maximum of 49 hours.

That limit is routinely ignored in factories throughout China. And the FLA found that most workers at the Hon Hai factories want to work even more overtime, so they can make more money. Hon Hai, also known as Foxconn, told the FLA that it will raise hourly salaries to compensate workers for the reduced hours.

Foxconn employs 1.2 million workers in China to assemble products not just for Apple, but for Microsoft Corp., Hewlett-Packard Co. and other pillars of the U.S. technology industry.

Apple stock fell after the report was released, dropping 1.3 percent to $609.86 at the close in New York. Apple, the world’s most valuable company, will have to cut profit margins or pass resulting costs on to consumers, said Alberto Moel, an analyst at Sanford C. Bernstein & Co. in Hong Kong.

“The benefit we, the consumers, and Apple extract from these products at the expense of Foxconn and its workforce is completely unequal,” Moel said in an interview this week. “Foxconn will also have to meet these requirements for all its customers — Apple, Dell, HP — because it is at risk of being audited at any production line.”

Auret van Heerden, the CEO of the FLA, said it’s common to find workers in developing countries looking for more overtime, rather than less.

“They’re often single, they’re young, and there’s not much to do. So frankly, they’d just rather work and save,” he said.

Average monthly salaries at the three factories inspected by the FLA ranged from $360 to $455. Foxconn recently raised salaries by up to 25 percent in the second major salary hike in less than two years.

Apple has kept a close watch on its suppliers for years, and in January took the further step of joining the FLA. The organization has audited overseas suppliers for fashion companies and other industries, but Apple was the first electronics company to join. It also commissioned the FLA to produce a special audit of Foxconn’s factories.

“Our team has been working for years to educate workers, improve conditions and make Apple’s supply chain a model for the industry, which is why we asked the FLA to conduct these audits,” Apple said in a statement.

The FLA has its roots in a 1996 meeting of multinational companies and nonprofits convened by President Bill Clinton, who challenged them to improve conditions for garment and shoe workers.